N. Korea urged to live up to nuke deal

The ceremony marked the start of work on the first of two light water reactors

KUMHO, North Korea -- The United States has called on Pyongyang to live up to its side of a nuclear deal as work began on the foundations of a U.S-led nuclear power plant project for North Korea.

On Wednesday a concrete pouring ceremony was held to mark the start of construction on the foundations of the first of two light-water reactors at the Kumho site on the east coast of North Korea.

The $4.6-billion project is part of a 1994 agreement between Washington and Pyongyang, under which the U.S.-led international consortium has agreed to build reactors in exchange for the North freezing its suspected nuclear weapons program.

A key part of the deal was that Pyongyang scrap its older reactors -- from which weapons-grade plutonium could be extracted -- and allow inspectors in to verify this has occurred.

But some U.S. officials are concerned about whether North Korea will allow international nuclear inspectors into the country, and an American official attending Wednesday's ceremony said the North has not yet complied with its obligations under the deal.

U.S. intelligence agencies suspect the North might have stockpiled enough plutonium to make one or two atomic bombs before the 1994 deal froze the program, a claim the North denies.

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The construction ceremony at the isolated Kumho site came amid signs of a thaw in the North's tense relations with the United States and Japan, and a renewed flurry of diplomatic activity on the divided peninsula. (Korean talks set)

'Axis of evil'

The reactor deal was struck under the Clinton administration, but U.S. President George W. Bush still allows funding despite his administration's concerns about the secretive communist nation's weapons program.

In January Bush labelled the North part of an "axis of evil," accusing it of developing nuclear and other weapons of mass destruction.

The Bush administration sent its highest ranking official to date to the Kumho site to witness Wednesday's start, funded by the Korean Peninsula Energy Development Organization (KEDO) consortium.

The U.S. negotiator on North Korea, Jack Pritchard, said his presence shows the U.S. commitment to the power project but he added that the North's failure to allow inspections could undermine its success.

The consortium is still waiting for North Korea to allow in inspectors so that the reactors can be completed by the end of the decade.

The White House has remained firm on the issue, arguing that it is necessary for Pyongyang to allow the inspections before critical work continues on the light water reactor. North Korea has not yet agreed to that demand.

The project is already several years behind schedule.

Frosty ties

Analysts say that in order to convince Pyongyang to let in international inspectors, it is necessary for the United States and North Korea to develop a stronger relationship.

Relations between the United States and North Korea peaked in October 2000 when U.S. Secretary of State Colin Powell's predecessor Madeleine Albright traveled to Pyongyang and held talks with North Korean leader Kim Jong-Il.

However, ties frayed following the change of administration, when Bush ordered a thorough review of relations with the North.

Relations between the two were given a boost last week following an impromptu meeting between U.S. Secretary of State Colin Powell and his North Korean counterpart on the sidelines of an Asian security meeting in Brunei.

North Korea's Foreign Minister Paek Nam Sun told Powell that Pyongyang was open to talks with Washington.

-- CNN Correspondent Rebecca MacKinnon in Kumho, North Korea contributed to this report